Scale-up or die
Businesses can no longer afford to just muddle along, but their leaders need more than a pep talk. Here are some practical tips for growth.
I’m increasingly forming the view that in business, muddling along will no longer do.
Entrepreneurship is commonly associated with striving and possessing outrageous ambition, characteristics I see often in scale-ups. It’s my belief that these characteristics are no longer the preserve of thrusting, dynamic entrepreneurs. They are becoming a prerequisite for basic business survival.
Through my work as entrepreneur in residence for the UK government, I have the privilege of getting to talk to a lot of businesses. It’s remarkably exciting to hear founders of scale-ups describe their ambition, often articulated as an objective to “double the size of the business” (in the shortest time possible).
However, I can’t help but be worried for business leaders who don’t possess such ambition. I fear for the sustainability and future longevity of their businesses.
Ambition is not enough
It’s not enough to simply want business growth. Success in business is all about actions, (or as I prefer to think of them “interventions”).
If you are a founder, the success of your business will be determined by the quality of the decisions made; the priorities selected; the actions taken; the invitations both accepted and declined: the quality of the execution.
But simply telling entrepreneurs and business leaders that they must be more ambitious is not especially helpful. So, based on my observations of businesses that are successfully scaling-up, what are some of the interventions common to fast growth businesses?
Cloning the founder’s passion
In my experience, few people can sell as effectively as the founder of a business. Brilliant scale-ups avoid the temptation to ‘delegate sales’ by hiring sales people. Successful scale-ups don’t just hire more sales staff – they empower them. They infect the whole sales team with the same level of passion as the founder and equip them with their own story that they can tell with as much charisma, enthusiasm and authenticity as the CEO.
An example of a business that has done this well is bottle water brand One Water, which gives 100 per cent of its profits to water projects in Africa, by sending its team on life changing field trips to the continent.
Creating new sales channels
Most people find it hard to believe government data that suggests that as many as two million UK businesses are not yet online. Businesses that scale-up rapidly are those that actively embrace every opportunity to sell. Look at Charlie Mullins and his company Pimlico Plumbers – everything from his vans to his website serve as sales engines.
Nothing is more influential than word of mouth marketing. With social media, the potential is exponential – effective promotion means The Body Coach, for example, now has more than 450,000 follows on Instagram, globally.
But for this to work, you have to have something to say. And your actions need to be sufficiently notable for people to be compelled to remark on them positively.
Rely on a plan, not hope
Wishful thinking is not a strategy. Successful scale-ups actively plan what they are going to shout about in order to drive awareness of and engagement with their business. It’s not logical to gamble the doubling of your business on one single intervention, which is why I advocate increasing the chances of success by planning eight shouts per year.
Expand your horizons
If you’re thinking about targeting new markets, adjacent sectors or new geographic regions, the internet has little regard for geographic boundaries. There’s never been more opportunity to export. I have spoken to several businesses that found taking 10 per cent market share in a new country far easier than gaining an extra 1 per cent in their domestic market.
In a growth economy I believe that the top-line is the new bottom-line. But sometimes doubling the valuation of your company is a higher priority than doubling sales.
To do this, it will be important to dilute any dependencies you have, so you are not overly reliant on any one single member of staff or customer; but customer retention can be just as vital as being able to win new business.
Look too at expanding your range of products and services so you can successfully cross- or up-sell. And protecting intellectual property or mergers and acquisitions can give – or protect – competitive advantage.
This is by no means an exhaustive list. But, as you go for growth, I hope that you find these examples of business multipliers helpful.
This is an edited version of a post Simon Devonshire published on his own website, tallmanbusiness.com, ahead of speaking at the CBI’s MSB Summit on 30 November 2015.